M/S. India Bulls Housing Finance Ltd v. Abdul Basheer and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **MONDAY, THE 16TH DAY OF JULY 2018 / 25TH ASHADHA, 1940** ## **WP(C).No. 23638 of 2018** ## **PETITIONER(S):** **M/S. INDIA BULLS HOUSING FINANCE LTD, HAVING ITS REGISTERED OFFICE AT M-62 & 63, FIRST FLOOR, CONNOUGHT PLACE AND CORPORATE OFFICE AT INDIABULLS HOUSE, 448-451 PHASE V, GURGAON-122-1 REPRESENTED BY AUTHORIZED OFFICER.** **BY ADVS.SRI.P.RADHAKRISHNAN (1) SRI.MADHU RADHAKRISHNAN SRI.NELSON JOSEPH** **SRI.M.D.JOSEPH** ## **RESPONDENT(S):** ## **1. ABDUL BASHEER,** **PROPRIETOR, M/S. WINTECH SYSTEMS & SERVICES, REHAJAS, HAMEED KUNJU NAGAR, PADA NORTH, KARUNAGAPPALLY, KOLLAM, PIN -690 518.** ## **2. SUHARA BEEVI,** **REHAJAS, HAMEED KUNJU NAGAR, PADA NORTH, KARUNAGAPPALLY, KOLLAM, PIN-690 518.** ## **3. SHAHINA S,** **W/O. LATE BADARUDEEN, MULLAVEED, PADA NORTH, KARUNAGAPPALLY VILLAGE, KOLLAM DT. KARUNAGAPPALLY-690 518** **4. ASUMA BEEVI, MULLAVEED, PADA NORTH, KARUNAGAPPALLY VILLAGE, KOLLAM DT., KARUNAGAPPALLY-690 518.** **5. SUHANA B,** - **MULLAVEED, PADA NORTH, KARUNAGAPPALLY VILLAGE, KOLLAM DT., KARUNAGAPPALLY-690 518.** **6. NAZREEN B, MULLAVEED, PADA NORTH, KARUNAGAPPALLY VILLAGE, KOLLAM DT., KARUNAGAPPALLY-690 518.** **WP(C).No. 23638 of 2018 (D)** **7. P.E AHAMMED KOYA, MULLAVEED, PADA NORTH, KARUNAGAPPALLY VILLAGE, KOLLAM DT., KARUNAGAPPALLY-690 518.** **8. THE SUB REGISTRAR, SUB REGISTRY OFFICE, KARUNAGAPPALLY, KOLLAM, PIN-691 508.** **9. VILLAGE OFFICER, KARUNAGAPPALLY VILLAGE OFFICER, KALLELLIBHAGOM, KARUNAGAPPALLY, KOLLAM, PIN 690 547.** **10. SANKARA PILLAI PRAMOD, SREE PADMAN, ADINADU SOUTH, KATTIKADAVU, ATHINAD NORTH, KARUNAGAPPALLY 690 542.** **R8 & R9 BY GOVERNMENT PLEADER A.C. VIDHYA** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **RVS.** **WP(C).No. 23638 of 2018 (D)** **APPENDIX** ## **PETITIONER(S)' EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE NOTIFICATION DATED 19-09-2007 ALONG WITH CERTIFICATE OF REGISTRATION ISSUED BY NHB.** - **EXHIBIT P2 TRUE COPY OF THE LOAN AGREEMENT DATED 21/02/2014.** - **EXHIBIT P3 TRUE COPY OF THE CONFIRMATION/DECLARATION OF DEPOSIT OF TITLE DOCUMENTS 2304/2008 AND 31/2014 DATED 21-2-2014.** - **EXHIBIT P4 TRUE COPY OF NOTICE DATED 6-12-2016 ISSUED UNDER SECTION 13(2).** - **EXHIBIT P5 TRUE COPY OF THE POSSESSION NOTICE DATED 3-4-2017 ISSUED UNDER SECTION 13(4).** - **EXHIBIT P6 TRUE COPY OF THE SALE NOTICE DATED 16/05/2018.** - **EXHIBIT P6(A) COPY OF PUBLICATION OF THE SALE NOTICE IN KERALA KAUMUDI DATED 25/05/2018.** - **EXHIBIT P6(B) COPY OF PUBLICATION OF THE SALE NOTICE IN TIMES OF INDIA DATED 25/05/2018.** - **EXHIBIT P7 TRUE COPY OF THE SALE CONFIRMATION LETTER 11/06/2018.** - **EXHIBIT P8 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE DATED 11-09-2017 BEARING NO. 4822/17 SHOWING ATTACHMENTS.** **EXHIBIT P8(A) TRANSLATED COPY OF EXT.P8.** **EXHIBIT P9 TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT IN WP 25794/2014, DATED 26-11-2014** **EXHIBIT P10 TRUE COPY OF JUDGMENTS OF THIS HON'BLE COURT IN WP 39770/2017.** **EXHIBIT P11 TRUE COPY OF JUDGMENT OF THIS HON'BLE COURT IN WP 29849/2017 DATED 23/03/2018. RESPONDENT(S)' EXHIBITS:** **NIL.** **/TRUE COPY/** **P.S.TO JUDGE** **RVS. 19/07/2018** ## ALEXANDER THOMAS, J. ----------------------------W.P(C).No.23638 Of 2018 --------------------------------Dated this the 16th day of July, 2018. J U D G M E N T It is averred that sale was conducted by way of public auction of the secured asset under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), by the petitioner-company in favour of the highest bidder-contesting respondent No.10. That later, sale confirmation letter was also issued. Subsequently, it is revealed that during enquiries made at the time of registration of the immovable property it was informed by the 8th respondent - SRO, Karunagappally, Kollam District, that sale cannot be registered on account of the attachment of the property by a third party in a suit in which the petitioner is not a party. It is the case of the petitioner that it can be seen from Ext.P-8 encumbrance certificate that all the attachments in question have been effected much after the creation of the mortgage in favour of the petitioner vide Ext.P-3 dated 21.2.2014. The petitioner would contend that the 8th respondent-SRO, is bound to register the sale of the secured asset in favour of the 10th respondent. The petitioner ::2:: W.P(C).No.23638 Of 2018 would also place reliance on similar judgments as in Exts.P-10 and P-11, etc. It is in the light of these factual aspects, that the petitioner has filed the instant Writ Petition seeking the following reliefs: “a) issue a writ of mandamus directing the 8th respondent to allow for the registration of sale of the immovable properties covered under Sale notice Ext P6 and Ext P7 sale confirmation letter and subsequently further direct the 9th respondent to affect mutation of the aforesaid immovable properties in favour of the 10th respondent. b) pass such other writ order or direction as this Hon'ble court deems fit and proper in the circumstance of the case. c) award the costs of the writ petition.” 2. The specific case of the petitioner is that the attachment effected as per Ext.P-2 in respect of the above said property is much after the creation of the mortgage of the property as per Ext.P-3 dated 21.2.2014. It has been held by this Court in the judgment in the case Madhan v. Sub Registrar , reported in 2014 (1) KLT 406, that attachments effected subsequent to the creation of equitable mortgage will be effaced after the property is purchased by another person in sale conducted by the Recovery Officer of the Debt Recovery Tribunal and such attachment will not affect the title and ownership of the purchaser over the subject property. The question considered by this Court in Madhan's case (supra) is as to whether the attachments effected subsequent to the creation of equitable mortgage be effaced after the property is purchased by another in sale conducted by the Recovery ::3:: W.P(C).No.23638 Of 2018 Officer of the Debts Recovery Tribunal. It was conclusively held by this Court therein that the preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under the Act is free from all encumbrances and attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property and such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is confirmed in favour of the petitioner and the declaration so sought by the petitioner is therefore granted and directed the Sub-Registrar and the Village Officer to efface the attachments effected subsequent to the mortgage from the relevant records. Otherwise those attachments would remain as a permanent taboo prejudicially affecting the marketability and title to the property even though they ceased to have any legal efficacy. It will be profitable to refer to paragraphs 1 & 9 of the abovesaid decision in Madhan's case (supra), which reads as follows: “Can the attachments effected subsequent to the creation of equitable mortgage be effaced after the property is purchased by another in sale conducted by the Recovery Officer of the Debts Recovery Tribunal? xxx xxx xxx ::4:: W.P(C).No.23638 Of 2018 9. The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under Ext. P5 sale certificate under the Act is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property. Such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is confirmed in favour of the petitioner. The declaration so sought by the petitioner is therefore granted and I further direct the Sub-Registrar and the Village Officer to efface the attachments effected subsequent to the mortgage from the relevant records. Otherwise those attachments would remain as a permanent taboo prejudicially affecting the marketability and title to the property even though they ceased to have any legal efficacy. The needful in relation to the property bought by the petitioner shall be done within a period of two months from the date of receipt of a copy of this judgment.” In the light of these aspects, it is ordered that it is for the petitioner and/or 10th respondent to file a comprehensive application before the 8th respondent-SRO, giving out the details about the impugned attachment referred to in Ext.P-8 and also produce documents to show that mortgage was created prior to those attachments. The petitioner should also make the beneficiaries of those attachments orders as respondents in that application. The 8th respondent-SRO will issue notices of hearing to the petitioner and contesting 10th respondent and the beneficiaries of those attachments. The parties will be at liberty to produce documents to show the details of the attachments in question. The petitioner may also produce the necessary documents to show that as to when the mortgage was created, etc for perusal. Thereafter the ::5:: W.P(C).No.23638 Of 2018 8th respondent-SRO will ascertain the factual issue as to whether the impugned attachments have been effected after the creation of the mortgage in question and if it is so found he should efface those attachments. After securing orders in the matter of effacement of the attachments, the petitioner and 10th respondent may present the documents for registration and the 8th respondent-SRO shall register the said documents if it is otherwise in order. 3. It is also further made clear that if the 8th respondent-SRO passes orders in favour of the petitioner and 10th respondent to efface those attachments, then the petitioner may produce a copy of that order before the 9th respondent-Village Officer, who shall also carryout necessary steps for effacing the attachments as entered in the relevant records. If the sale is so registered, the parties could also seek for mutation of the property which may be considered in accordance with the Transfer of Registry Rules. With these observations and directions, the above Writ Petition (Civil) will stand finally disposed of. Sd/- ALEXANDER THOMAS, Judge. Bkn/- // True copy // P.A to Judge//